Mumbai Property Prices May Rise as Strait of Hormuz Disruption Hits Costs
3 min readMumbaiMar 19, 2026 10:25 PM IST
Real estate prices in the Mumbai Metropolitan Region MMR are set to rise as a surge in construction material and logistics costs triggered by disruptions in the Strait of Hormuz pushes up project expenses, according to a report by Anarock Group, a real estate services and consulting firm.
The report estimates that the ongoing conflict has already added roughly Rs 50 per sq ft to the cost of high rise construction, with developers likely to eventually pass on the burden to homebuyers, particularly in the affordable and mid-income segments.
Key construction inputs have seen sharp price increases. Steel prices have risen by around 20 per cent, from Rs 62 to Rs 72 per kg, while hot rolled coil is currently at Rs 51 to Rs 56 per kg and may increase further if disruptions persist.Aluminium, used in building facades and infrastructure such as metro stations, has climbed to Rs 3.5 lakh per tonne amid production cuts in Gulf countries. Bitumen, essential for road projects, is now priced at Rs 48 to Rs 51 per kg.
The spike in costs is being driven largely by logistics disruptions. With the Strait of Hormuz effectively blocked, shipments are being rerouted via the Cape of Good Hope, adding 6,000 to 10,000 nautical miles and delaying deliveries by 10 to 20 days. This has increased freight costs by Rs 1.5 to Rs 3.5 lakh per container, further compounded by higher marine fuel prices around Rs 1 lakh per tonne along with war surcharges and insurance premiums.
Keval Valambhia, chief operating officer of CREDAI-MCHI, a developers’ industry body, said, “We are seeing early signs of 5–8 per cent cost pressures, especially in energy-intensive materials and logistics. Segments like tiles and ceramics are already witnessing supply-side stress due to LPG constraints, which could have a cascading effect on finishing timelines.”
While developers and contractors are currently absorbing the additional costs, a prolonged conflict could lead to price hikes and project delays. “Even if the Gulf war ends tomorrow, a full reset will take one to three months… much of the damage to 2026 is, so to say, cast in steel and concrete,” the report noted.
“As of now, contractors are managing the shortages and cost hikes. But we may face a problem down the road,” said an official from the Maharashtra State Road Development Corp (MSRDC), which is currently executing the Missing Link project on the Mumbai-Pune Expressway and the Versova-Bandra Sea Link. “
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An official from the MMRDA indicated that project cost may fluctuate in accordance with the variation clause in the contracts based on indices of by the central government.
But delays and project halts may be on the horizon. “At this stage, developers are largely absorbing these shocks, but a prolonged disruption could translate into delayed execution cycles and selective price recalibrations,” said Valambhia.
